Marina Gorbis's Blog, page 1365

A Framework for Understanding VUCA

Executives have taken to using the military acronym VUCA–Voltility, Uncertainty, Complexity, Ambiguity–to describe the world in which they operate and to ask that question: In a VUCA world, what’s the point of strategy?

Strategy does still have a purpose, but building one in a VUCA environment requires more nuanced thinking. And treating those four traits as a single idea leads to poorer decision making. Watch and listen as Nathan Bennett provides a framework, first featured in an HBR article, for how you should deal with a world that includes V, and U, and C, and A.

A Surprising Way to Jump-Start Entrepreneurship

Thank the NetFood Stamp Entrepreneurs: How Public Assistance Enables Business BootstrappingWorking Knowledge

You don’t often hear economists tout assistance programs for moderate-income families as spurs to entrepreneurship, but Gareth Olds of Harvard Business School found that government-funded safety nets can have the effect of “reducing the risks of business ownership and relaxing credit constraints.” One program providing health insurance to children in moderate-income families boosted the rate of new-business creation, raised new companies’ chances of survival, and increased the self-employment rate by 23%. Olds tells Working Knowledge: “What I was seeing was reproducible and scientifically valid. It also just happened to be personally valid for me."



Meaning that when he was growing up in Alaska, his family lived paycheck to paycheck and relied on Medicaid and the Food Stamp program, yet his parents managed to start a successful vocational-training program for dental assistants. The government assistance helped, he says: People like his parents are more willing and able to walk the high wire of entrepreneurship if there’s a safety net to catch them. —Andy O'Connell

A Brief HistoryCreativity CreepThe New Yorker

There's no shortage of books and articles on how to be more creative. And in one recent survey, CEOs ranked creativity the number one attribute they value in their employees. But it might be worth taking a step back to better understand exactly what we mean by "creativity," argues Joshua Rothman. Tracing the history of the idea from the Enlightenment to today's notion of creativity as "the missing piece in a life that seems routinized, claustrophobic, and frivolous," Rothman notes key moments when creativity went from meaning to "experience life in a creative way" to being indistinguishable from "making stuff." In the 1950s, for example, psychologists started measuring creativity by what people produced rather than what was going on in their brains. Researchers began to think of creativity in terms of objects, not minds. This isn't necessarily a bad thing, but Rothman reminds us that output isn’t the be-all and end-all of creativity. For "imaginative transcendence and openness to the world," he writes, "you'd be better off clearing your head and taking a walk in the woods."

Open Your Wallet How to Get Into an Ivy League College — Guaranteed Businessweek

Can predictive analytics guarantee that your kid gets into a top college? That's what entrepreneur Steven Ma is betting on with his company ThinkTank Learning, which "makes bets on student admissions the way a trader plays the commodities markets." About 10,000 students, the majority of them Asian immigrants, are enrolled in some aspect of the program, for fees ranging from $7,000 for a standard package to hundreds of thousands of dollars for guaranteed admission. ThinkTank, which has annual revenue of more than $18 million, says it's cracking the code of getting children into the best colleges with a combination of tutoring, application assistance, and guidance about which volunteer and extracurricular activities are most important.



Others, however, say he's taking advantage of wealthy immigrant families. "The commodification of fear is unfair to the parents, it’s unfair to the kids, and is deeply disturbing," says Stanford lecturer Denise Pope. Ma seems unfazed: He has a 78% retention rate on guaranteed contracts, and in the case of the son of one often-absent Hong Kong CEO, the money may not have gone so much to tutoring as it did to attention. "Steven was the only one who believed in me and told me I still had a chance," says the current Syracuse student.

It’s Brain SurgeryDoctor Turns to 3D Printers in a Race to Save a Toddler’s MindThe Verge

Here’s a story about a 3D printer being used to make a squishy yet accurate model of a child’s brain so that surgeons at Boston Children’s Hospital could more carefully plan an operation to relieve seizures. The model of the brain was printed in soft plastic, and blood vessels were shown in a contrasting color for easier navigation. The doctors could essentially use the model to do a dress rehearsal before the operation. They could hold the artificial version, cut it, manipulate it, and look for things, Mona Lalwani writes in The Verge. The hospital has been using the technology for about a year, and there are high hopes for even more applications: In the future, on-demand anatomy printing could make its way into emergency rooms to meet the needs of trauma cases. —Andy O'Connell

Inside Shenzhen Visiting the World's Manufacturing EcosystemJoi Ito

MIT Media Lab director Joi Ito's dispatch on his recent trip to Shenzhen, China, and its "ecosystem of suppliers and factories" is a rare glimpse into a world that makes a lot of our stuff, a world that, as Ito writes, probably couldn't exist anywhere else. His tour involves visiting factories, where management is "willing and able to try all kids of new processes to produce things that have never been manufactured before" (and who live in the same dorms as their workers); a clichéd Blade Runner-esque market where used cell-phone chips are bought by the pound by manufacturers that run out of parts, making it "very likely that the 'new phone' you bought from [AT&T] has 'recycled' Shenzhen parts somewhere inside"; and a shop that makes knockoff phones in the shape of key chains, boom boxes, and little cars that "aren't like anything that existed anywhere else...Many were designed by the so-called Shanzhai pirates who started by making knockoffs of existing phones, but had become agile innovation shops for all kind of new ideas because of the proximity to the manufacturing ecosystem."



Ito finishes his post by stating that the region, "like Silicon Valley, has become such a 'complete' ecosystem that we're more likely to be successful building networks to connect with Shenzhen than to compete with it head on."

BONUS BITSA Bit of a Hodgepodge

How Should We Program Computers to Deceive? (Pacific Standard)
Let’s Stop Idealizing the Home-Cooked Family Dinner (Slate)
Legal or Not, the Pot Business Is Still Wacky (AP)

Tips for Cold-Emailing Intimidatingly Powerful People

CEOs are thirsty for insight from the front lines. And yet those of us on those front lines – whether we are customers or employees – are often hesitant to reach out to senior leaders who are only an email away.

I saw this the other day in a friend who works for Salesforce. My friend is a mid-level manager, and he’s very observant and bright. He has a ton of insight and perspective about Salesforce that Marc Benioff, the founder and CEO of Salesforce, would be better off knowing. And, while I don’t know Benioff, I’ll bet with confidence that he craves this information, because he could use it to make better decisions. That’s what I found by working with Bill George – the former CEO of Medtronic and now a professor at Harvard Business School – on True North. In interview after interview, we found that CEOs wanted a better picture of what their employees and customers wanted. CEOs repeatedly told us how unexpectedly isolating they found the job. But when I asked my friend whether he would email Benioff, he demurred, not wanting to ruffle any feathers in the hierarchy.

I don’t understand my friend’s reluctance. The whole way I accidentally became an author in the first place was by sending a cold email to Bill after he spoke with our business school, and briefly shook his hand afterward. I also cold emailed G.E.’s dynamo Chief Marketing Officer and senior vice president Beth Comstock after my last book, Little Bets, came out, and she got right back to me with a mailing address to send it to. Eventually, she invited me to sit on a small Innovation Advisory board for G.E. Beth is a force of nature, and has become a friend. It all started with a guess at her email address based on other G.E. email addresses. And although I’ve never spoken with Jeff Bezos, I have emailed him twice — it’s a poorly kept secret in publishing that if you are an author and have a real problem with Amazon, that’s the “nuclear option.” In my experience, your problem will soon be addressed.

I may be an outlier, but I’m not alone. Blair Taylor is now chief community officer at Starbucks after a cold email the former head of the Los Angeles Urban League sent to CEO Howard Schultz. It led to a phone conversation and ultimately, a job offer.

Best-selling author and Wharton Professor Adam Grant frequently responds to cold emails, so long as they are relevant and written in a spirit of giving, not taking — the topic of his research.

And Craig Good, a Pixar employee for decades who started at the company as a security guard and left as a legendary employee and member of the technical team, recalls what happened when he sent Steve Jobs an unsolicited email. When Good was working at Lucasfilm Ltd., Pixar’s predecessor, he was in an in-house security and janitorial team, which he thought worked much better than external guard services (where he had also had previous experiences). So as Pixar was building their new headquarters in Emeryville, “I emailed Steve laying out my case that security should be in-house, as in ‘us,’ not contracted as in ‘them’. I Cc’d Tom Carlisle, who was in charge of the project. Steve’s reply was simply, ‘I agree 100%.’ A week or so later I saw Tom in the lunch room and asked what happens next. He said, ‘My experience is that when Steve gives an answer like that no further discussion is necessary.’ Pixar Safety & Security became an in-house operation before the company moved to Emeryville.”

Of course, not every cold email is so wildly successful. I’ve emailed Mark Zuckerberg, Larry Page, and yes, Marc Benioff, and didn’t hear back. I guessed at their email addresses, so maybe I got them wrong. Or maybe they just had nothing to say in reply. Oh well. No skin off my back. It was worth the try.

I learned about the benefits (and associated failures) of cold emailing when I worked as an Associate for Summit Partners, the venture capital firm. Each day we typically cold called or cold emailed dozens of CEOs, since Summit got access to growth equity deals by contacting people directly. I learned a few rules of thumb that I still use today:

Expect a 50-90% failure rate the first time you cold-email someone – i.e., no response. If you don’t get a reply, don’t worry – it’s hardly as bad as calling someone cold and having them hang up on you.
It’s not hard to guess or find an email address. Email addresses are usually firstname.lastname@company.com or, if it’s an entrepreneur, firstname@company.com. You can always call the main phone number and say you’re trying to email something to the CEO, and they will usually give the address.
You are politely persistent if you email once every two days, but probably should give up after 3 or 4 tries if there’s been no reply.
For busy execs, the weekends are by far the best time to try to get a note to them since they typically have more time to read something on a computer screen, rather than a device. And a surprising number of executives do read all their email – especially the personal notes. (Schultz famously does, and imagine how many messages he must receive.)
Keep your message short and to the point. Brevity increases the chances it will actually get read – and relevance increases the chances of a reply.

Does this sound awkward or icky to you? Ask yourself why. You have a great deal of insight and wisdom that the senior leaders of the world would really like to know. A concise email to the right person can open up new possibilities for learning and growth – for both of you.

Too many people are afraid to write. Do it some time and see what happens. Just ask: What’s the worst thing that can happen? And: What’s the best thing?

The Best Leaders Are Insatiable Learners

Nearly a quarter century ago, at a gathering in Phoenix, Arizona, John W. Gardner delivered a speech that may be one of the most quietly influential speeches in the history of American business — a text that has been photocopied, passed along, underlined, and linked to by senior executives in some of the most important companies and organizations in the world. I wonder, though, how many of these leaders (and the business world more broadly) have truly embraced the lessons he shared that day.

Gardner, who died in 2002 at the age of 89, was a legendary public intellectual and civic reformer — a celebrated Stanford professor, an architect of the Great Society under Lyndon Johnson, founder of Common Cause and Independent Sector. His speech on November 10, 1990, was delivered to a meeting of McKinsey & Co., the consulting firm whose advice has shaped the fortunes of the world’s richest and most powerful companies. But his focus that day was on neither money nor power. It was on what he called “Personal Renewal,” the urgent need for leaders who wish to make a difference and stay effective to commit themselves to continue learning and growing. Gardner was so serious about this learning imperative, so determined that the message would get through, that he wrote the speech out in advance because he wanted “every sentence to hit its target.”

What was his message? “We have to face the fact that most men and women out there in the world of work are more stale than they know, more bored than they would care to admit,” he said. “Boredom is the secret ailment of large-scale organizations. Someone said to me the other day ‘How can I be so bored when I’m so busy?’ I said ‘Let me count the ways.’ Look around you. How many people whom you know well — people even younger than yourselves—are already trapped in fixed attitudes and habits?”

So what is the opposite of boredom, the personal attribute that allows individuals to keep learning, growing, and changing, to escape their fixed attitudes and habits? “Not anything as narrow as ambition,” Gardner told the ambitious McKinsey strategists. “After all, ambition eventually wears out and probably should. But you can keep your zest until the day you die.” He then offered a simple maxim to guide the accomplished leaders in the room. “Be interested,” he urged them. “Everyone wants to be interesting, but the vitalizing thing is to be interested…As the proverb says, ‘It’s what you learn after you know it all that counts.’”

In these head-spinning times, even more so than when John Gardner offered his timeless advice, the challenge for leaders is not to out-hustle, out-muscle, or out-maneuver the competition. It is to out-think the competition in ways big and small, to develop a unique point of view about the future and get there before anyone else does. The best leaders I’ve gotten to know aren’t just the boldest thinkers; they are the most insatiable learners.

Roy Spence, perhaps the most interested (and interesting) advertising executive I’ve ever met, recently published a book called The 10 Essential Hugs of Life, a funny and moving take on the roots of success. Among his wise and folksy pieces of advice (“Hug your failures,” “Hug your fears,” “Hug yourself”) is a call to “Hug your firsts” — to seek out new sources of inspiration, to visit a lab whose work you don’t really understand, to attend a conference you shouldn’t be at. “When you’re a kid,” he says, “every day is full of firsts, full of new experiences. As you get older, your firsts become fewer and fewer. If you want to stay young, you have to work to keep trying new things.”

Spence cites as one of his inspirations management guru Jim Collins, who, as a young Stanford professor, sought advice and counsel from his learned colleague John Gardner. What did Spence learn from Collins? “You’re only as young as the new things you do,” he writes, “the number of ‘firsts’ in your days and weeks.” Ask any educator and they’ll agree: We learn the most when we encounter people who are the least like us. Then ask yourself: Don’t you spend most of your time with people who are exactly like you? Colleagues from the same company, peers from the same industry, friends from the same profession and neighborhood?

It takes a real sense of personal commitment, especially after you’ve arrived at a position of power and responsibility, to push yourself to grow and challenge conventional wisdom. Which is why two of the most important questions leaders face are as simple as they are profound: Are you learning, as an organization and as an individual, as fast as the world is changing? Are you as determined to stay interested as to be interesting? Remember, it’s what you learn after you know it all that counts.

Maybe Your First Layoffs Should Be Board Members

Large corporations with small boards (around nine to 10 directors) outperformed their peers on shareholder return by 8.5 percentage points, while firms with large boards (13 to 14) underperformed peers by 10.85 percentage points, says a study prepared for the Wall Street Journal. The analysis, by governance-research organization GMI Ratings, looked at 2011–2014 returns for nearly 400 companies with market cap of at least $10 billion. The reasons for the performance gap are unclear, but small boards may be more decisive, cohesive, and hands-on.

Predict What Employees Will Do Without Freaking Them Out

Imagine one of your managers walks into their subordinate’s office and says, “Our data analysis predicts that you will soon get restless and think of leaving us, so we want to make you an offer that our data shows has retained others like you.”  Would your employees welcome the offer, marveling at the value of your HR analytics?  Or, might they see images of Big Brother, and be repelled by a company snooping on the data they generate as they work? Predictive analytics can enable a customized employment value proposition that maximizes mutual benefit for organizations and their talent; but at what point do predictive analytics become too creepy?

For example, predictive analytics can reduce employee turnover costs. In 2009, The Wall Street Journal reported on Google’s algorithm that crunched data from employee reviews and promotion and pay histories to determine which employees are most likely to quit, and more recently Google was lauded for pioneering the use of big data to predict employee turnover.  Laszlo Bock said this helped Google “get inside people’s heads even before they know they might leave.”  This month, Credit Suisse said it calculates who is likely to quit, and proactively offers them new career roles.  Will Wolf, the Global Head of Talent Acquisition & Development said that even if employees are not interested in the offered roles, “they are blown away that we’re going out of our way to try to find them something interesting and new.”

Creepy? Or, perhaps not so much.  Yet.

But companies are looking beyond cost savings—to driving outcomes. HR predictive analytics is touted as transforming HR from retrospective and reactive administrative reporting to strategically integrated modeling to predict behaviors, attitudes and capabilities that drive tangible organizational outcomes.  Some evidence shows a correlation between HR predictive analytics and organizational performance. Companies like Google are taking this even further. Google is launching a new firm called “Calico” designed to use search tools to improve life expectancy, and it was previously reported that a question considered by the Google People Analytics group was “what if working at Google increased your life span by a year?” In the quest to improve productivity and work life, the information that companies can analyze about you at work is limited only by software.

This insight has produced a common mantra for HR analytics: “to know our employees as well as we know our customers.”  It’s no coincidence that this sounds like consumer marketing.  Marketing concepts like brands, segments, value propositions and engagement are fertile metaphors for retooling HR, but there is also a more subtle lesson here.

Marketing often influences consumers through unconscious habits, as described in Charles Duhigg’s book, “The Power of Habit.” Duhigg describes his own habit of buying a cookie in the company cafeteria at 3:30 p.m. each day. He realized this was a combination of mid-afternoon boredom, and a desire to get away from his desk and to gossip. The cookie was incidental to the actual reward, but that made it no less a culprit in weight gain.  Once he realized that, he could break the cookie habit.  Suppose predictive analytics found such cookie-eating employees using your data on work schedules and cafeteria purchases, and you shared it with them, to help them be healthier?  Would they be delighted or disturbed?

Consider this object lesson from marketing.  Pregnancy is an event that changes otherwise stubborn purchasing habits, so retailers want to know about a pregnancy as early as possible.  Duhigg’s New York Times story reports that Target marketing analysts built a predictive algorithm to identify pregnant customers based on their purchasing habits and other demographic information.  They sent those customers ads for pregnancy related products.  What could be wrong with helping pregnant women be aware of products or services they need, as early as possible?

Apparently, women responded negatively if it was obvious that they received pregnancy ads before they revealed their pregnancy.  They responded more positively if they received “an ad for a lawn mower next to diapers.”  Duhigg reports one executive saying, “as long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons…As long as we don’t spook her, it works.” Duhigg also reports that Target company executives said the article contained “inaccurate information,” so the story may exaggerate, but the lesson remains:  Effective predictive analytics depends on how real people react, not just on the elegance of the analytics.

Organization leaders will increasingly confront such situations with their employees, not only their customers.  Consider the potential to influence employee behaviors in arenas such as employee benefits, health care and wellness.

In the rush to ask “What can HR analytics predict?” perhaps the more vital question is “What should HR analytics predict?”

Legal compliance may not be a sufficient answer.  A business law journal article, “The Eavesdropping Employer” concludes that “The American legal system’s effort to protect employee privacy is … not properly equipped to defend against excessive invasions of privacy that come from increasingly-sophisticated monitoring practices.”  Appropriate standards may vary across companies and demographic groups.  Google employees have said to me, “as long as our data is held and analyzed by our own HR Department, we trust them.”  Google’s employees may be unique because they work for an organization dedicated to changing the world through personal data and analytics.  Yet, one study reports that one-third of employees are comfortable sharing personal data with their employer, particularly millennials who will become a larger share of the future workforce.  Mark Berry, the Vice President of Human Capital Analytics and Reporting at ConAgra Foods has said, “we want to know our employees as well as our customers,” but added that the company has safeguards for types of data that can and cannot be collected.

How should those safeguards be constructed?  What is the balance between predictive feasibility and predictive acceptability?  These questions require artfully combining analytical rigor with sensitivity and insight into the humanity and ethics of work.

HR is a discipline well-suited to answering these questions, but are HR leaders prepared?  Encouraged by constituents, product vendors and compelling stories, HR leaders understandably rush to increase analytic and data skills. Yet, an even more vital and unique role for HR is to help leaders balance what can be predicted against what should be predicted.

Predictive Analytics in Practice

An HBR Insight Center




Nate Silver on Finding a Mentor, Teaching Yourself Statistics, and Not Settling in Your Career
Beware Big Data’s Easy Answers
Who’s Afraid of Data-Driven Management?
When to Act on a Correlation, and When Not To

The Fall of the Talent Economy?

Roger Martin, former dean of the Rotman School of Management, on why talent’s powerful economic position is unsustainable.​

Download this podcast

Breaking Down the Freelance Economy

The American workforce is now 34% freelancer, according to a commissioned by the Freelancers Union and the recently-merged Elance-oDesk. Well, sort of: 14.3 million of the 53 million freelancers counted in the survey are “moonlighters” (people with full-time jobs doing independent work in their spare time). Another 5.5 million are temp workers. Here’s the full breakdown:

In any case, it’s a lot of people. But what’s hard to say is whether it’s more or less than there used to be. For the past few years, the main data source for those trying to quantify the freelance economy has been a 2006 Government Accountability Office report that put the number of “contingent workers” at 42.6 million, or 31% of the workforce. And yes, 53 million is more than 42.6 million and 34% is more than 31%, but the two surveys weren’t exactly counting the same people (moonlighters, for example, aren’t contingent workers). And back in 2006, the GAO estimated that “contingent workers constituted a relatively constant proportion of the total workforce from 1995 through 2005.”

This doesn’t really support the claims we’ve been hearing for almost two decades now that the U.S. is becoming a nation of free agents, freelancers, or supertemps. It doesn’t entirely contradict them either, though. Back in February, in an exhaustive (and maybe exhausting) look at the numbers on self-employment, I tried to square the grand claims with the pretty inconclusive data by arguing that long declines in old-style independent work in agriculture and small-scale retail and services were probably masking a rise in white-collar independent work. But while there’s some evidence to back this up, such as the Census Bureau’s annual tally of “nonemployer businesses,” which shows a 29% rise from 2002 to 2012, government data on the phenomenon is pretty spotty.

This new survey of 5,052 U.S. adults, conducted by the research firm Edelman Berland in July for the Freelancers Union and Elance-oDesk, is a welcome attempt to fill in the picture. To really get a sense of where we’re going, though, they will need to keep paying for identical surveys for years to come (the back-office firm MBO Partners has been doing this for a narrower population of “independent workers” for three years now). When I asked Freelancers Union founder and executive director Sara Horowitz if that’s the plan, she said yes. “Having real longitudinal data would be very helpful for everyone.”

It would be even more helpful, and the data would be even more credible, if this stuff just became part of the Bureau of Labor Statistics’ regular employment surveys. But government statistics-gatherers are on the defensive these days in Washington, so they’re not going to be expanding their surveys any time soon. Which is too bad, because white-collar freelancers almost certainly are becoming a more important economic force, and it would be nice if more of the country’s economic policy-makers were aware of that.

Should You Get an MBA?

At least once a month an ambitious and hard-working person in their 20s asks me, “Should I get an MBA?” I earned my MBA from Stanford’s Graduate School of Business in 2000, and since 2007 I’ve been an Instructor and an internal coach back at the GSB, helping hundreds of students develop their leadership and interpersonal skills. Here’s how I respond to those inquiries. First, it’s critical to determine whether your expectations for an MBA are aligned with what the degree will likely do for you. MBA programs offer three different types of benefits, all of which vary tremendously from one school to another.

1. Practical leadership and management skills. Management education has changed significantly over the last few decades. Previously it focused on quantitative analysis in areas such as finance and operations, with little emphasis on other aspects of organizational life. As a result MBAs were often seen as bean-counters myopically focused on data and out of touch with the challenges managers face in the real world.

MBA programs responded by expanding their offerings in areas such as strategy, organizational behavior and leadership. B-school curricula are still intensely quantitative, but as Stanford Dean Garth Saloner told McKinsey, “The [quantitative] skills of finance and supply chain management and accounting and so on, I think those have become more standardized in management education, have become kind of what you think of as a hygiene factor: Everybody ought to know this.”

Business schools have realized that it’s not sufficient to provide quantitative and analytical training, because within a few years of leaving school (or even immediately upon graduation) their alumni will add value more through their ability to lead and manage others than through their talents as individual contributors. And effectiveness in these more senior roles requires an entirely different interpersonal skill set. Saloner goes on to note that, “the softer skill sets, the real leadership, the ability to work with others and through others, to execute, that is still in very scarce supply.”

But the ability to provide quality training in these areas is unevenly distributed across MBA programs. The best schools have made leadership and interpersonal skills a high priority—Stanford now offers twelve sections of Interpersonal Dynamics to more than 400 students each year, making this labor-intensive course our most popular elective. Second-tier schools are making an effort to catch up, but high-caliber programs in these fields are difficult to establish . Harvard’s Bill George has said, “I don’t think you can teach leadership, I think you can learn about it” through experiential activities that bring students together to help them understand their strengths and limitations, provide feedback and promote self-awareness, and these activities require a very different approach from traditional lecture methods.

I’m not suggesting that the quantitative and technical skills that an MBA provides aren’t useful—they absolutely are. But they’re also increasingly available through other venues that individuals can access on their own at a much lower cost. The special advantage of an MBA program is the opportunity to develop leadership and interpersonal skills with a group of peers in a sequence of experiential courses informed by current research. So ask yourself:

Do the MBA programs I’m considering provide practical leadership and management training?
How well-established are these courses? How much support do they have from the school? How much support do they have from the surrounding community?
What do alumni say about their experiences in these courses? How have they benefited from this training?
And what alternative means are available to me to develop these practical skills?

2. A credential that sends a signal to the marketplace. No career paths absolutely require an MBA—it’s an optional degree and is nothing like a JD, an MD or the other credentials that professions such as law and medicine make mandatory. There are many senior people in general management roles, in consulting and even in financial services who don’t have an MBA—so don’t assume that the credential will necessarily serve a meaningful purpose in your chosen field.

As a coach I have two different “markets”—my students at Stanford and my private clients, who are primarily senior leaders, and in both settings my degree sends a useful signal. New students feel more comfortable knowing that I’ve been in their shoes (albeit 15 years ago), and prospective clients trust that I understand the complexities of their world and the challenges they face.

But it’s not a given that an MBA will have this effect. In my first job after business school I interacted with a very diverse range of communities, and while I never misled anyone about the fact that I had an MBA, I didn’t advertise it either. I knew that some people in my field had negative impressions of MBAs, and I needed a chance to prove myself as an individual before being stereotyped. My particular version of this experience may have been unusual, but by no means is it unique—there are many fields and organizations in which MBAs are viewed with skepticism and even disdain.

In addition, the nature of the signal being sent depends on the specific MBA program’s reputation, and this is not simply a matter of prestige. Harvard, Stanford, and Wharton routinely top lists of U.S. business schools, but they also have a reputation for entitlement and arrogance. While some firms seek out graduates from elite schools, others avoid them out of a concern that they will be difficult to work with and disruptive to the established culture. So ask yourself:

What market am I in now? What markets might I seek to enter in the future?
Who’s interested in my services? How might this change if I had an MBA?
How are MBAs perceived in these markets? What signals does an MBA send in these markets? What stereotypes (both positive and negative) might I face as an MBA?
What is the specific reputation of the MBA programs I’m considering? How are these schools and their alumni viewed within my desired markets?
And what alternative means are available to me to send the signals I desire to communicate?

3. Membership in a learning community and access to an alumni network. Business school emphasizes working in groups, and MBA students often learn as much from their peers as they do from faculty, so it’s important to consider who you’ll be working alongside for two years. Those same people will become your fellow alumni, and access to that network is one of the most valuable benefits an MBA program can offer.

Of course, alumni networks aren’t created equal. Larger MBA programs yield larger networks. Certain networks are concentrated in specific geographic areas or in specific industries. And some B-school experiences create networks that are particularly active sources of mutual support.

I’ve benefited tremendously from the support of my fellow GSB alumni during two major professional transitions. In my job search after graduation and later when I began exploring executive coaching as a career path, other Stanford alumni were extraordinarily generous with their time and insights, and there’s no way I could have succeeded without their help.

All this said, there’s a misperception about the importance of socializing in business school as a means of cultivating these ties. To be sure, my students devote a substantial amount of time and energy to elaborate social activities, and I often find myself amused at the lengths to which they go to entertain themselves. However, while it’s true that I’m middle-aged and boring, and a quiet night at home is my idea of a good time, I was pretty boring even as a student, and I didn’t spend much time at parties or other social events.

But I didn’t need to in order to benefit from the GSB network—the school’s relatively small size and communal culture help ensure that graduates feel a sense of obligation to help fellow alumni. And the fact that I can’t pay back the many people who helped me is motivation to “pay it forward” by doing as much as I can to support recent alumni seeking help from me. So ask yourself:

What do I know about the students at the MBA programs I’m considering? Are they like-minded peers? Do I see myself learning alongside them?
What do I know about the alumni networks of these programs? How active are they? Are they concentrated in geographic areas and professional fields of interest to me?
What support does a school provide to its alumni network and to individual alumni? Do alumni return frequently to participate in events and activities at the school?

One final point on diversity: I have no doubt that my experience in business school was made substantially easier by the fact that I’m a straight, white, American man with an Ivy League undergraduate degree. Even as MBA programs have sought to attract more diverse student populations in recent years, B-schools are still disproportionately filled with people like me. And even at Stanford, which prides itself on its inclusiveness, I know that women, gays and lesbians, people of color, students from outside the U.S., and non-native English speakers can feel isolated in business school and find the MBA experience more difficult and stressful. I hope to encourage people from a wide range of backgrounds to consider business school as an option, and it feels important to acknowledge this current state of affairs if anything is to change.

How Unethical Behavior Becomes Habit

When a former client’s secretary was arrested for embezzlement years before his own crimes were uncovered, Bernie Madoff commented to his own secretary, “Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big.”

We now know that Madoff’s Ponzi scheme started when he engaged in misreporting to cover relatively small financial losses. Over a 15-year period, the scam grew steadily, eventually ballooning to $65 billion, even as regulators and investors failed to notice the warning signs.

Many of the biggest business scandals of recent years — including the News of the World phone hacking scandal, billions in rogue trading losses at UBS, and the collapse of Enron — have followed a similar pattern: The ethical behavior of those involved eroded over time.

Few of us will ever descend as deeply into crime as Bernard Madoff, yet we all are vulnerable to the same slippery slope. We are likely to begin with small indiscretions such as taking home office supplies, exaggerating mileage statements, or miscategorizing a personal meal in a restaurant as business-related. Nearly three-quarter of the employees who responded to one survey reported that they had observed unethical or illegal behavior by coworkers in the past year.

“The safest road to Hell is the gradual one — the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts,” wrote C. S. Lewis. Our research backs up both Lewis’s intuition and the anecdotal evidence: People often start their misconduct with small transgressions and then slide down a slippery slope.

Two of us (Dave, Lisa, and our team) found that people who are faced with growing opportunities to behave unethically are much more likely to rationalize this conduct than those who are presented with an abrupt change. We predicted that if we could get people to cheat a little in one round, they might be willing to cheat a bit more in another round, and finally cheat “big” in a third round.

This is precisely what we found: When given a series of problem-solving tasks, 50% of our subjects cheated to earn $.25 per problem in the first round, and 60% cheated to earn $2.50 per problem in the final round. However, the people in the abrupt change group who could not cheat during the first two rounds were much less willing to cheat big for $2.50 per problem during the final round (only about 30% did).

This suggests that employees might look at their slightly exaggerated mileage statements as “rounding up.” But rationalizing minor indiscretions inevitably influences how they view progressively worse behaviors and may lead them to commit bigger offenses (e.g., billing their employers for personal travel expenses) that they initially would not have considered.

To make matters worse, people are more likely to overlook the unethical behavior of others when it deteriorates gradually over time. For example, one of us (Francesca) found, with colleague Max Bazerman, that people who played the role of auditors in a simulated auditing task were much less likely to report those who gradually inflated their numbers over time than those who made more abrupt changes all at once, even though the level of inflation was eventually the same.

Unfortunately, the assumption that unethical workplace behavior is the product of a few bad apples has blinded many organizations to the fact that we all can be negatively influenced by situational forces, even when we care a great deal about honesty. Yet approaches to warding off the slippery-slope problem need not to be drastic. In their book Nudge: Improving Decisions about Health, Wealth, and Happiness, Richard Thaler and Cass Sunstein illustrate how a small and unobtrusive nudge in the right direction can lead people to eat better, save more for retirement, and conserve energy.

Our research similarly indicates that ethical nudges can help people avoid the types of indiscretions that might start them down the slippery slope. For example, in a study conducted with a major U.S. insurance company, Francesca and colleagues found that customers who signed the statement “I promise that the information I am providing is true” prior to reporting their annual mileage — that is, at the top of the page — were significantly more honest in their reporting compared to those who reported first and signed at the bottom of the page.

In a different study, Dave and Lisa found that even subconsciously exposing people to ethical content increased their moral awareness and prompted more ethical decisions. Perhaps with this in mind, some organizations have incorporated ethical nudges into images, symbols, stories, and slogans. For example, the University of Arizona’s Eller College of Management recently created posters featuring the image of a fire alarm to call attention to cheating. And at International Paper, employees are given a wallet card with a set of ethics-related questions to consider when making business decisions.

When moral standards are unclear or unenforced, it’s easy for employees to feel emboldened to engage in questionable behaviors that are readily rationalized. Environments that nudge employees in the right direction, and managers who immediately identify and address problems, can stop ethical breaches before they spiral out of control.